Product menus work for leasing, too

Donna Harris covers automotive retailing for Automotive News

It used to be that F&I managers would write off lease customers when it came to selling products.

The big seller has always been vehicle service contracts … and what good are they to a customer who doesn't own the vehicle and is only leasing it for two to four years, the thinking went.

Not so anymore. Consumer leasing is on the rise, and finance managers are tailoring presentations to lease customers.

Electronic menu software allows dealerships to customize presentations, and some are using the software to offer special lease menus or lease packages. Some stores develop paper menus to appeal to their lease clients.

Among the best sellers are interior and exterior protection, tire-and-wheel coverage, dent-and-ding repair coverage and windshield protection.

Deanna Lawson, business manager at Northern Motor Co. in Escanaba, Mich., offers a package of products as part of her menu presentation, promoting windshield protection, paint sealant and fabric protection.

She offers excess wear-and-tear coverage as a stand-alone option. One lessee recently opted for a prepaid maintenance plan and tire-and-wheel coverage.

Richard O'Connor, vice president of F&I for Sonic Automotive Inc., the nation's third-largest dealership group, says Sonic has a menu just for lease customers and that it has helped boost product sales penetration to those folks.

Vicki Kovalcik, a finance manager with the Penske Automotive Group, the nation's second-largest dealership group, says she has three menus: one for cash customers, one for finance customers and one for lease customers.

The lease menu excludes a guaranteed asset protection plan and substitutes a prepaid maintenance plan for a vehicle service contract.

Tom Wilson, finance director for Riverside Automotive Group in Escanaba, Mich., likes to offer tire-and-wheel coverage and key replacement plans to lessees.

Paint protection and fabric protection go over well because they can help customers avoid excess wear-and-tear charges at the end of the lease.

Add prepaid maintenance, he says, and it's a "gas 'n' go" lease -- a care-free lease requiring no out-of-pocket for maintenance beyond what's rolled into the monthly payment.

By the way, finance companies understand dealers' need to sell products and they're expanding their offerings.

For example, spokesman Justin Leach says Toyota Financial Services, known for its leasing programs, intends to offer excess wear-and-tear coverage later this year.

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